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Spotify's direct deals press record-label nerves

Published 09/06/2018, 03:09 PM
© Reuters.  Spotify's direct deals press record-label nerves
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  • Major music labels are edgy over a new initiative from Spotify (SPOT -1.4%) that might chip away at control over the star system, The New York Times reports.
  • The streaming-music firm has quietly struck direct licensing deals over the past year with independent artists who are bypassing the big three music conglomerates: Universal Music Group (VIVHY -0.9%), Sony (SNE +1.4%) and Warner Music Group. The arrangements aren't exclusive, and have a bigger financial cut as well as allowing artists to retain ownership of the recordings, a critical differentiator.
  • The deals are small -- for now, the giants worry. Such deals could be a foot in the door to reshape the music industry.
  • Spotify's contracts with the big labels forbid it from turning into a record company, but “Licensing content does not make us a label, nor do we have any interest in becoming a label,” says CEO Daniel Ek.


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